A New York federal judge is not convinced that the inclusion of MetaBirkins artwork in a museum exhibition will not run afoul of the permanent injunction awarded to Hermès earlier this year. In an opinion and order dated March 13, Judge Jed Rakoff of the U.S. District Court for the Southern District of New York rejected “Mason Rothschild” (real name Sonny Estival)’s motion seeking “clarification regarding whether the permanent injunction… in this case would prohibit [him] from providing permission to a Swedish museum to display MetaBirkins artworks in its upcoming exhibition on Andy Warhol and Business Art.” Following an evidentiary hearing, Judge Rakoff denied Rothschild’s motion, stating that he “cannot conclude, based on the evidence before [the court], that Rothschild’s requested permission comports with the injunction.”
Some Background: Hermès filed a trademark infringement, dilution, and cybersquatting lawsuit against Rothschild in 2022 stemming from his promotion and sale of the Birkin artwork-linked “MetaBirkins” NFTs. A jury sided with Hermès early this year, finding him liable on all three of Hermès’s causes of action, and the court subsequently issued a permanent injunctionbarring Rothschild and “all others in active concert or participation with him” from “manufacturing, distributing, circulating, selling, marketing, offering for sale, advertising, promoting … or otherwise disposing of [the so-called] ‘MetaBirkins’ NFTs and any merchandise related to [them].”
The injunction also prohibits Rothschild and co. from “making any statement or representation or performing any act that is likely to lead the public to believe that any ‘MetaBirkins’ NFTs or related merchandise is in any manner associated or connected with Hermès and/or its ‘Birkin’ trademark and/or trade dress.”
Amid a pending appeal of the jury verdict, the injunction has been at the center of a back-and-forth between the parties after the Spritmuseum in Stockholm, Sweden contacted Rothschild to get his permission to display the MetaBirkins artworks in an upcoming Andy Warhol and Business Art exhibition curated by Dr. Blake Gopnik, an art expert who was slated to be an expert witness on Rothschild’s behalf at trial. (The court ultimately blocked Gopnik from testifying.) Counsel for Rothschild has claimed that Rothschild would not be violating the injunction by agreeing to have the MetaBirkins works included in the exhibition, while Hermès has argued otherwise.
In light of the injunction-centric clash and in order to avoid “the possibility of needless and wasteful collateral litigation” from Hermès in the event that the MetaBirkins works appear in the museum show, Rothschild sought a clarification from the court about the scope of the injunction to determine whether granting permission to the museum to include the MetaBirkins works would run afoul of it.
MetaBirkins in the Museum?
At the outset, Judge Rakoff stated in his opinion and order that as a matter of “essential background to the court’s conclusion,” it is worth noting that the jury determined that Hermès showed by a preponderance of the evidence that Rothschild’s use of Hermès’s Birkin mark “was intentionally designed to mislead potential consumers into believing that Hermès was associated with [the] MetaBirkins project.’” In particular, the jury determined that Rothschild “labeled and designed his NFTs in the way that he did for the express purpose of exploit[ing] the goodwill and reputation of Hermès” and that “‘the jury verdict is unequivocal that [Rothschild] purposely intended to confuse the public into [mistakenly] thinking there was an association between his project and Hermès.’” In effect, Judge Rakoff held that the jury found that Rothschild “was simply a swindler.”
Continuing on, Judge Rakoff asserted that “to boot, Hermès showed that, even after the jury’s verdict, [Rothschild] carried on profiting from his fraud by ‘continuing to market, sell, and collect royalties from the MetaBirkins NFTs.” Against this background of “unapologetic and continuing fraud,” the court entered the permanent injunction at issue “after concluding that Hermès had satisfied each of the relevant requirements that the Supreme Court elaborated in eBay Inc. v. MercExchange.”
As for whether the inclusion of the MetaBirkins works in the museum exhibition would violate the injunction, the court held that based on the evidence before it, it “cannot conclude” that Rothschild’s request “steers clear of the injunction’s prohibitions.” In particular, Judge Rakoff found that declarations from Rothschild’s counsel regarding the nature of the use of the MetaBirkins artworks and trademarks – and context about the result of Hermès’s lawsuit – in the exhibition (and potentially, in connection with corresponding merch) were either too vague or contrasted with the statements given by two of the exhibition organizers. As such, Judge Rakoff found that there is “a real risk that, in plain contravention of the injunction, [Rothschild] might be using the exhibit to promote his infringing MetaBirkins NFTs or cause further confusion to consumers.”
Without “a clear, concrete statement that, as the jury unanimously found, [Rothschild] designed the MetaBirkins NFTs to dupe the public into believing that Hermès was somehow behind the images, there is little reason to expect that those visiting the exhibit would understand that [his] creation and distribution of MetaBirkins NFTS was a fraudulent endeavor in which Hermès had no part,” the court stated.
A Disclaimer? Rakoff further noted that while a representative for the museum told the court that the museum is “absolutely prepared to” include a disclaimer with the exhibition saying that the MetaBirkins have “nothing to do with Hermès,” the judge was unpersuaded, saying that such a statement is “in some sense inaccurate” since Rothschild’s purpose in making the MetaBirkins images “was, as the jury found, to generate confusion with Hermès.” Moreover, such a statement is “far removed,” according to the court, from “expressly warning the public that [Rothschild] engaged in an intentional fraud designed to confuse the public as to his NFTs’ bogus association with Hermès.”
Given “the lack of any details whatsoever about how the exhibit will describe [the] MetaBirkins NFTs to the public and knowing full well that the person curating the exhibit” – Dr. Gopnick – is “openly hostile to the jury’s verdict,” as indicated by an op-ed he wrote in the wake of the trial, Judge Rakoff said that the court cannot approve Rothschild’s “requested permission as compliant with the injunction.” Accordingly, the court denied the permission requested by Rothschild.
Sound Familiar? As TFL previously noted, if the museum-specific arguments sound familiar … it may be because MSCHF made similar claims in response to the preliminary injunction issued against it in the ongoing Vans-initiated Wavey Baby case. In that case, the U.S. District Court for the Eastern District of New York enjoined MSCHF from promoting its Wavy Baby sneakers by displaying them on its website, on its mobile app, and in art exhibitions, an order that was subsequently upheld by the Second Circuit in December. Among other things, MSCHF argued on appeal that the “unconstitutional” injunction prevented it from displaying the allegedly infringing Wavy Baby sneakers in art museums and galleries, thereby, “uniquely impact[ing] [MSCHF’s] speech and do[ing] nothing to prevent any harm, let alone irreparable harm, to Vans (especially given that images of Wavy Baby already proliferate on the Internet and in [MSCHF collaborator Tyga’s] Freaky Deaky music video).”
A panel for the Second Circuit was not persuaded by MSCHF’s argument, finding that the Wavy Baby “does create a likelihood of consumer confusion, and the district court correctly concluded that Vans is likely to prevail on the merits.” As such, it further held that the lower court “did not exceed its discretion by enjoining MSCHF’s marketing and sale of the Wavy Baby.”
The case is Hermès International, et al. v. Mason Rothschild, 1:22-cv-00384 (SDNY).